GRAPHICAL METHOD

1. In order to ensure optimal health (and thus accurate test results), a lab technician
needs to feed the rabbits a daily diet containing a minimum of 24 grams (g) of fat,
36 g of carbohydrates, and 4 g of protein. But the rabbits should be fed no more
than five ounces of food a day. Rather than order rabbit food that is custom-
blended, it is cheaper to order Food X and Food Y, and blend them for an optimal
mix. Food X contains 8 g of fat, 12g of carbohydrates, and 2g of protein per ounce,
and costs P8.00 per ounce. Food Y contains 12 g of fat, 12 g of carbohydrates,
and 1 g of protein per ounce, at a cost of P12.00 per ounce. What is the optimal
blend?
Variables:
Let x - amount of food X
Let y - amount of food Y

Food x Food y
Fat 8x 12y ≥ 24
Carbs 12x 12y ≥ 36
Protein 2x y ≥4
Cost 0.2x 0.3y

Minimize C = 0.2x + 0.3y

Subject to : 8x + 12y ≥ 24 (1)
12x + 12y ≥ 36 (2)
2x + y ≥ 4 (3)
x≥0 (4)
y≥0 (5)
Table Value
8x + 12y = 24 12x + 12y = 36 12x + y = 4

x 0 8 x 0 3 x 0 1
3
y 2 0 y 3 0 y 4 0

(0 , 2), (8 , 0) (0 , 3), (3 , 0) 1
(0, 4), ( 3, 0)
Test points (0, 0)
8x + 12y ≥ 24 12x + 12y ≥ 36 2x + y ≥ 4 x≥0 y≥0
8(0) + 12(0) > 24 12(0)+12(0)> 36 2x(0)+(0) > 4 0≥0 0≥0
0≥8 0 ≥ 10 0≥4 TRUE TRUE
FALSE FALSE FALSE

Elimination Method
(12x + 12y > 36) = 12x + 12y = 36
(2x + y > 4) x 6 = 12x + 6y = 24
6𝑦 12
=
6 6
y=2
 2x + y = 4

2x + 2 = 4
2x = 4 – 2
X=1

Solution
(0 , 3), (0 , 4), (8 , 0), (1 , 2)

For (0 , 3) For (8 , 0)
= 0.2x + 0.3y = 0.2x + 0.3y
= 0.2(0) + 0.3 (3) = 0.2(8) + 0.3(0)
= 0 + 0.9 = 1.6+ 0
= 0.9 = 1.6
For (0 , 4) For (1 , 2)
= 0.2x + 0.3y = 0.2x + 0.3y
= 0.2(0) + 0.3(4) = 0.2(1) + 0.3(2)
= 0+ 1.2 = 0.2+ 0.6
= 1.2 = 0.8

Decision:
x= 1
y= 2
Maximum P = 0.8
The right blend in order to minimize cost of 0.8 is to have 1 of Food X
and 2 amounts of Food Y having the same content of nutrients.
 2. A dietician wishes to mix two types of foods in such a way that vitamin contents of
the mixture contain at least 8 units of vitamin A and 10 units of vitamin C. Food ‘I’
contains 2 units/kg of vitamin A and 1 unit/kg of vitamin C. Food ‘II’ contains 1
unit/kg of vitamin A and 2 units/kg of vitamin C. It costs P50 per kg to purchase
Food ‘I’ and P70 per kg to purchase Food ‘II’. Formulate this problem as a linear
programming problem to minimize the cost of such a mixture.

Variables:
Let x - Food I
Let y - Food II

Food I Food II
Vitamin A 2x y ≥8
Vitamin B x 2y ≥ 10
Cost 50x 70y

Minimize C = 50x + 70y

Subject to: 2x + y ≥ 8 (1)
x + 2y ≥ 10 (2)
x≥0 (3)
y≥0 (4)

Table Value
2x + y = 8 x + 2y = 10

x 0 4 x 0 10
y 8 0 y 5 0
(0 , 8), (4 , 0) (0 , 5), (10 , 0)
Test points (0, 0)
2x + y ≥ 8 x + 2y ≥ 10 x≥0 y≥0
2(0) + (0) ≥ 8 0 + 2(0) ≥ 10 0≥0 0≥0
0≥ 8 0≥ 10 TRUE TRUE
FALSE FALSE

Elimination Method
(2x + y ≥ 8) x 1 = 2x + y = 8
(x + 2y ≥ 10) x 2 = 2x + 4y = 20
−3𝑦 −12
=
−3 −3
y=4
 x + 2y = 10
x + 2(4) = 10
x + 8 = 10
x = 10 – 8
x=2

Solution
(0, 8), (10, 0), (2, 4)

For (0, 8) For (2, 4)

= 50x + 70y = 50x + 70y
= 50(0) + 70(8) = 50(2) + 70(4)
= 0 + 560 = 100 + 280
= 350 = 380
For (10, 0)
= 50x + 70y
= 50(10) + 70(0)
= 500 + 0
= 500

Decision:
x= 2
y=4
Maximum P = 380
In order for the dietician to achieve the right mixture of the vitamin
contents Food I must be 4 and there should be 2 for Food II minimizing the
cost of P380.
 3. A cooperative society of farmers has 50 hectare of land to grow two crops X and
Y. The profit from crops X and Y per hectare are estimated as P10, 500 and P9,
000 respectively. To control weeds, a liquid herbicide has to be used for crops X
and Y at rates of 20 liters and 10 liters per hectare. Further, no more than 800 liters
of herbicide should be used in order to protect fish and wild life using a pond which
collects drainage from this land. How much land should be allocated to each crop
so as to maximize the total profit of the society?

Variables:
Let x - Crop X
y – Crop Y

Crop X Crop Y
Fabricating X 12y ≤ 180
Finishing 20x 10y ≤ 800
Profit 8000x 12000y

Maximize P = 10500 x + 9000 y

Subject to : x + y ≤ 50 (1)
20x + 10y ≤ 800 (2)
x≥0 (3)
y≥0 (4)

Table Value
x + y = 50 20x + 10y = 800

x 0 50 x 0 40

y 50 0 y 80 0

(0 , 50), (50 , 0) (0 , 80), (40 , 0)

Test points (0, 0)
x + y ≤ 50 20x + 10y ≤ 800 x≥0 y≥0
9(0) + 12(0) ≤ 180 0 + 3(0) ≤ 30 0≥0 0≥0
0≤8 0 ≤ 30 TRUE TRUE

TRUE TRUE

Elimination Method
(x + y ≤ 50) x 20 = 20x + 20y = 1000
(20x + 10y ≤ 800) x 1 = 20x + 10y = 800
10𝑦 200
=
10 10
y = 20
 20x + 10y = 800
20x + 10(20) = 800
20x + 200 = 800
20x = 800 – 200
20𝑥 600
=
20𝑥 20
x = 30
Solution
(0, 80), (50, 0), (0 , 0), (30, 20)
For (0, 80) For (0, 0)
= 10500 x + 9000 y = 10500 x + 9000 y
= 10500(0) + 9000(80) = 10500(0) + 9000(0)
= 0 + 720,000 =0+0
= 720,000 =0
For (50, 0) For (30, 20)
= 10500 x + 9000 y = 10500 x + 9000 y
= 10500(50) + 9000(0) = 10500(30) + 9000(20)
= 525,000 + 0 = 315,000 + 180,000
= 525,000 = 495,000

Decision:
x= 0
y = 80
Maximum P = 720,000
In order for the dietician to maximize the total profit of the society, the
farmers must allocate the land for 80 of Crop II and no Crop I to achieve the
maximum profit of P720,000.
 4. A manufacturing company makes two models A and B of a product. Each piece of
Model A requires 9 labor hours for fabricating and 1 labor hour for finishing. Each
piece of Model B requires 12 labor hours for fabricating and 3 labor hours for
finishing. For fabricating and finishing, the maximum labor hours available are 180
and 30 respectively. The company makes a profit of P8000 on each piece of model
A and P12000 on each piece of Model B. How many pieces of Model A and Model
B should be manufactured per week to realize a maximum profit? What is the
maximum profit per week?

Variables:
Let x - Number of pieces of Model A
y - Number of pieces of Model B.

Model A Model B
Fabricating 9x 12y ≤ 180
Finishing x 3y ≤ 30
Profit 8000x 12000y

Maximize P = 8000x + 12000y

Subject to : 9x + 12y ≤ 180 (1)
x + 3y ≤ 30 (2)
x≥0 (3)
y≥0 (4)
Table Value
9x + 12y = 180 x + 3y = 30

x 0 20 x 0 30

y 15 0 y 10 0

(0 , 15), (20 , 0) (0 , 10), (30 , 0)

Test points (0, 0)
9x + 12y ≤ 180 x + 3y ≤ 30 x≥0 y≥0
9(0) + 12(0) ≤ 180 0 + 3(0) ≤ 30 0≥0 0≥0
0≤8 0 ≤ 30 TRUE TRUE
TRUE TRUE

Elimination Method
(9x + 12y ≤ 180) x 1 = 9x + 12y = 180
(x + 3y ≤ 30) x 9 = 9x + 27y = 270
−15𝑦 −90
=
−15 −15
y=6
 x + 3y = 30
x + 3(6) = 30
x + 18 = 30
x = 30 – 18
x = 12

Solution
(0, 10), (20, 0), (12, 6)
For (0, 10) For (12, 6)
= 8000x + 12000y = 8000x + 12000y
= 8000(0) + 12000(10) = 8000(12) + 12000(6)
= 0 + 120,000 = 96,000 + 72,000
= 120,000 = 168,000
For (50, 0)
= 8000x + 12000y
= 8000(20) + 12000(0)
= 160,000 + 0
= 160,000

Decision:
x = 12
y=6
Maximum P = 168,000
The business is advised to manufacture 12 units of Model A and 6 units
of Model B every week in order to achieve the maximum profit of P168,000.
 5. A factory makes tennis rackets and cricket bats. A tennis racket takes 1 hour of
machine time and 3 hours of craftsman’s time in its making while a cricket bat takes
3 hour of machine time and 1 hour of craftsman’s time. In a day, the factory has
the availability of not more than 42 hours of machine time and 24 hours of
craftsman’s time.

(i) What number of rackets and bats must be made if the factory is to work at
full capacity?

(ii) If the profit on a racket and on a bat is P20 and P10 respectively, find the
maximum profit of the factory when it works at full capacity.

Variables:
Let x – Tennis racket
Let y – Cricket bat

Tennis racket Cricket bat

Machine Time x 3y ≤ 42
Craftsman’s Time 3x y ≤ 24
Profit 20x 10y

Maximize P = 20x + 10y

Subject to : x + 3y ≤ 42 (1)
3x + y ≤ 24 (2)
x≥0 (3)
y≥0 (4)
Table Value
x + 3y = 42 3x + y = 24

x 0 42 x 0 8
y 14 0 y 24 0

(0 , 14), (42 , 0) (0 , 24), (8 , 0)

Test points (0, 0)
x + 3y ≤ 42 3x + y ≤ 24 x≥0 y≥0
(0) + 3(0) ≤ 42 3(0) + (0) ≤ 24 0≥0 0≥0
0 ≤ 42 0 ≤ 24 TRUE TRUE
TRUE TRUE

Elimination Method
(x + 3y ≤ 42) x 3 = 3x + 9y = 126
(3x + y ≤ 24) x 1 = 3x + y = 24
8𝑦 102
=
8 8
y = 12.75
 3x + y = 24
3x + 12.75 = 24
3x = 24 – 12.75
3x = 11.25
3𝑥 11.25
=
3 3
x = 3.75

Solution
(0, 14), (0, 0), (8, 0), (3.75, 12.75)
For (0, 14) For (3.75, 12.75)
= 20x + 10y = 20x + 10y
= 20(0) + 10(14) = 20(3.75) + 10(12.75)
= 0 + 140 = 75 + 127.5
= 140 = 202.5
For (8, 0) For (0, 0)
= 20x + 10y = 20x + 10y
= 20(8) + 10(0) = 20(0) + 10(0)
= 160 + 0 =0
= 160

Decision:
x = 3.75 or 4
y = 12.75 or 13
Maximum P = 202.5 or 203
In order to maximize the profit up to 203, the factory must manufacture
4 rackets and 13 bats.
SIMPLEX METHOD
1. The Cannon Hill furniture Company produces tables and chairs. Each table takes
four hours of labor from the carpentry department and two hours of labor from the
finishing department. Each chair requires three hours of carpentry and one hour of
finishing. During the current week, 240 hours of carpentry time are available and
100 hours of finishing time. Each table produced gives a profit of $70 and each
chair a profit of $50. How many chairs and tables should be made?

Variables:
Let x1 – Tennis racket
Let x2 – Cricket bat

Department Tables (x1) Chairs (x2) Constraint

Carpentry (hr) 4x 3y ≤ 240

Finishing (hr) 2x y ≤ 100

Profit 70x 50y

Maximize P = 70x1 + 50x2

Subject to : 4x1 + 3x2 ≤ 240
2x1 + x2 ≤ 100
x1, x2 ≥ 0

New Program with Slack Variable:

Maximize P = 70x + 50x2 + S1 + S2

Subject to : 4x1 + 3x2 + S1 = 240
2x1 + x2 + S2 = 100
x1, x2, S1 + S2 ≥ 0
 Table 1

Cj 70 50 0 0
Product Quantity X1 X2 S1 S2
0 S1 240 4 3 1 0
0 S2 100 2 1 0 1
Zj 0 0 0 0 0
Cj-Zj 70 50 0 0

MRT: 240 ÷ 4 = 60
100 ÷ 2 = 50

Entering Row (X1) = Leaving Row (S2) ÷ Pivot Element

100 2 1 0 1 ÷2
= 50 1 1 0 1
2 2

New S1 = Old Row – (Pivot Column Old Row PCOR * Entering Row X1)
240 4 3 1 0
- 4 (50 1 1 0 1
2 2
40 0 1 1 -2

Table 2

Cj 70 50 0 0
Product Quantity X1 X2 S1 S2
0 S1 40 0 1 1 -2
1 1
70 X1 50 1 2 0 2
Zj 3500 70 35 0 35
Cj-Zj 0 15 1 -35

MRT: 40 ÷ 1 = 40
Entering Row (X2) = Leaving Row (S1) ÷ Pivot Element
40 0 1 1 -2 ÷1
= 40 0 1 1 -2

New X1 = Old Row – (Pivot Column Old Row PCOR * Entering Row X2)
50 1 1 0 1
2 2
1 0 1 1 -2)
- (40
2
30 1 0 1 3
-
2 2

Table 3

Cj 70 50 0 0
Product Quantity X1 X2 S1 S2
40 0 1 1 -2
50 X2
1 3
-
70 X1 30 1 0 2
Zj 4100 70 50 15 5
Cj-Zj 0 0 -15 -5

Decision:
x1 = 40
x2 = 30
Maximum P = 4,100
The Cannon Hill furniture Company must produce 40 tables and 30
chairs in order to maximize the profit at $4100 at the extent.
 2. Mayflower furniture makes two products, beds and wardrobes, which must be
processed through assembly and finishing departments. Assembly has 60hrs
available and finishing has 48hrs. Each bed requires 4hrs in assembly and 2hrs in
finishing; each wardrobe requires 2hrs in assembly and 4hrs in finishing. If the
profit is $8 per bed and $6 per wardrobe, what is the best possible combination of
beds and wardrobes must Mayflower produce and sell to realize a maximum profit
given the constraints.

Variables:
Let x1 – Beds
Let x2 – Wardrobes

Department Beds (x1) Wardrobes (x2) Constraint

Assembly 4x1 2y ≤ 60
Finishing 2x1 4y ≤ 48
Profit 8x1 6y

Maximize P = 8x1 + 6x2

Subject to : 4x1 + 2x2 ≤ 60
2x1 + 4x2 ≤ 48
x1, x2 ≥ 0

New Program with Slack Variable:

Maximize P = 8x1 + 6x2 + 0S1 + 0S2

Subject to : 4x1 + 2x2 + S1 = 60
2x1 + 4x2 + S2 = 48
x1, x2, S1, S2 ≥ 0
 Table 1

Cj 8 6 0 0
Product Quantity X1 X2 S1 S2
0 S1 60 4 2 1 0
0 S2 48 2 4 0 1
Zj 0 0 0 0 0
Cj-Zj 8 6 0 0

MRT: 60 ÷ 4 = 15
48 ÷ 2 = 24

Entering Row (X1) = Leaving Row (S1) ÷ Pivot Element

60 4 2 1 0 ÷4
1 1
= 15 1 2 4 0

New S2 = Old Row – (Pivot Column Old Row PCOR * Entering Row X1)

48 2 4 0 1
1 1
- 2 (15 1 2 4 0)
1
18 0 3 - 1
2

Table 2

Cj 8 6 0 0
Product Quantity X1 X2 S1 S2
1 1
15 1 2 4 0
8 X1
1
-
0 S2 18 0 3 2 1

Zj 120 8 4 2 0
Cj-Zj 0 2 -2 0

MRT: 18 ÷ 3 = 6
Entering Row (X2) = Leaving Row (S2) ÷ Pivot Element

- ÷3
18 0 3 1
1 1
=6 0 1 - 3
6
New X1 = Old Row – (Pivot Column Old Row PCOR * Entering Row X2)

15 1 0
1
- (6 1 )
0 1 - 3
6
1 1
12 1 0 -
3 6

Table 3

Cj 8 6 0 0
Product Quantity X1 X2 S1 S2
1 1
-
12 1 0 3 6
8 X1
1 1
6 0 1 - 3
6 X2 6

Zj 4100 70 50 15 5
Cj-Zj 0 0 -15 -5

Decision:
x1 = 12
x2 = 6
Maximum P = 132
Mayflower furniture must produce 12 beds and 6 wardrobes to be able to
get the maximum profit of $132 in the combination of both products.
 3. The Cut-Right Company sells sets of kitchen knives. The Basic Set consists of 2
utility knives and 1 chef’s knife. The Regular Set consists of 2 utility knives, 1
chef’s knife, and 1 slicer. The Deluxe Set consists of 3 utility knives, 1 chef’s knife,
and 1 slicer. The profit is $30 on a Basic Set, $40 on a Regular Set, and $60 on a
Deluxe Set. The factory has on hand 800 utility knives, 400 chef’s knives, and 200
slicers. Assuming that all sets will be sold, how many of each type should be made
up in order to maximize profit? What is the maximum profit?

Variables:
Let x1 – number of Basic Sets
Let x2 – number of Regular Sets
Let x3 – number of Deluxe Sets

Basic (x1) Regular (x2) Deluxe (x3) Constraint

Utility’s Knives 2x1 2x2 3x3 ≤ 800
Chef’s Knives x1 x2 x3 ≤ 400
Slicer x2 x3 ≤ 200
Profit 30x1 40x2 60x3

Maximize P = 30x1 + 40x2 + 60x3

Subject to : 2x1 + 2x2 + 3x3 ≤ 800
x1 + x2 + x3 ≤ 400
x2 + x3 ≤ 200
x1, x2, x3 ≥ 0

New Program with Slack Variable:

Maximize P = 30x1 + 40x2 + 60x3 + 0S1 + 0S2 + 0S3

Subject to : 2x1 + 2x2 + 3x3 + S1 = 800
x1 + x2 + x3 + S2 = 400
x2 + x3 + S3 = 200
x1, x2, x3, S1, S2, S3 ≥ 0
 Table 1

Cj 30 40 60 0 0 0
Product Quantity X1 X2 X3 S1 S2 S3
0 S1 800 2 2 3 1 0 0
0 S2 400 1 1 1 0 1 0
0 S3 200 0 1 1 0 0 1
Zj 0 0 0 0 0 0 0
Cj-Zj 30 40 60 0 0 0

MRT: 800 ÷ 3 = 267

400 ÷ 1 = 400
200 ÷ 1 = 200

Entering Row (X3) = Leaving Row (S3) ÷ Pivot Element

200 0 1 1 0 0 1 ÷1
=200 0 1 1 0 0 1

New S1 = Old Row – (Pivot Column Old Row PCOR * Entering Row X3)
800 2 2 3 1 0 0
-1(200 0 1 1 0 0 1)
= 200 2 -1 0 1 0 -3

New S2 = Old Row – (Pivot Column Old Row PCOR * Entering Row X3)
400 1 1 1 0 1 0
-1(200 0 1 1 0 0 1)
= 200 1 0 0 0 1 -1
 Table 2

Cj 30 40 60 0 0 0
Product Quantity X1 X2 X3 S1 S2 S3
0 S1 200 2 -1 0 1 0 -3
0 S2 200 1 0 0 0 1 -1
60 x3 200 0 1 1 0 0 1
Zj 12,000 0 60 60 0 0 60
Cj-Zj 30 -20 0 0 0 -60

MRT: 200 ÷ 2 = 100

200 ÷ 1 = 200

Entering Row (X1) = Leaving Row (S1) ÷ Pivot Element

200 2 -1 0 1 0 -3 ÷2
=100 1 1 0 1 0 3
- -
2 2 2

New S2 = Old Row – (Pivot Column Old Row PCOR * Entering Row X1)
200 1 0 0 0 1 -1
-1(100 1 1 0 1 0 3
- - )
2 2 2
= 100 0 1 0 1 1 1
-
2 2 2

New X3 = Old Row – (Pivot Column Old Row PCOR * Entering Row X1)
200 0 1 1 0 0 1
-0(100 1 1 0 1 0 3
- - )
2 2 2
= 200 0 1 1 0 0 1
 Table 3

Cj 30 40 60 0 0 0
Product Quantity X1 X2 X3 S1 S2 S3
30 x1 100 1 1 0 1 0 3
- -
2 2 2
0 S2 100 0 1 0 1 1 1
-
2 2 2
60 x3 200 0 1 1 0 0 1
Zj 42,000 30 45 60 15 0 15
Cj-Zj 0 -5 0 -15 0 -15

Decision:
x1 = 100
x2 = 0
x3 = 200
Maximum P = $42,000
Cut-Right Company, in order to maximize the profit up to $42,000, must
produce 100 of the Basic set knives, 200 of the Deluxe Set and no need for the
Regular Set.
 4. A company manufactures two types of novelty souvenirs made of plywood.
Souvenirs of type A require 5 minutes each for cutting and 10 minutes each for
assembling. Souvenirs of type B require 8 minutes each for cutting and 8 minutes
each for assembling. There are 3 hours 20 minutes available for cutting and 4
hours for assembling. The profit is P50 each for type A and P60 each for type B
souvenirs. How many souvenirs of each type should the company manufacture in
order to maximize the profit?

Variables:
Let x1 – Type A
Let x2 – Type B

Department Type A (x1) Type B (x2) Constraint

Cutting 4x1 8x2 ≤ 200
Assembly 10x1 8x2 ≤ 240
Profit 50x1 60x2

Maximize P = 50x1 + 60x2

Subject to : 5x1 + 8x2 ≤ 200
10x1 + 8x2 ≤ 240
x1, x2 ≥ 0

New Program with Slack Variable:

Maximize P = 50x1 + 60x2 + 0S1 + 0S2

Subject to : 5x1 + 8x2 + S1 = 60
10x1 + 8x2 + S2 = 48
x1, x2, S1, S2 ≥ 0
 Table 1

Cj 50 60 0 0
Product Quantity X1 X2 S1 S2
0 S1 200 5 8 1 0
0 S2 240 10 8 0 1
Zj 0 0 0 0 0
Cj-Zj 50 60 0 0

MRT: 200 ÷ 8 = 25
240 ÷ 8 = 30

Entering Row (X2) = Leaving Row (S1) ÷ Pivot Element

200 5 8 1 0 ÷8
5 1
=25 8 1 8 0

New S2 = Old Row – (Pivot Column Old Row PCOR * Entering Row X2)

240 10 8 0 1
5 1
-8(25 8 1 8 0)

=40 5 0 -1 1

Table 2

Cj 50 60 0 0
Product Quantity X1 X2 S1 S2
5 1
60 X2 25 8 1 8 0
0 S2 40 5 0 -1 1
75 15
Zj 1500 2 60 2 0

Cj-Zj 0 - 0

MRT: 40 ÷ 5 = 8
Entering Row (X1) = Leaving Row (S2) ÷ Pivot Element

40 5 0 -1 1 ÷5

1 1
=8 1 0 - 5
5

New X2 = Old Row – (Pivot Column Old Row PCOR * Entering Row X1)

25 1 0
1
- (8 1 )
1 0 - 5
5
1 1
20 0 1 -
4 8

Table 3

Cj 50 60 0 0
Product Quantity X1 X2 S1 S2
1 1
-
20 0 1 4 8
60 X2
1 1
8 1 0 - 5
50 X1 5
5
2
Zj 1600 50 60 5

Cj-Zj 0 0 -5 -

Decision:
x1 = 8
x2 = 20
Maximum P = 1600
A company has to manufactures 8 units of souvenirs of type A and 20 of
souvenirs of type B to achieve th maximum profit of $1600.
 5. A baker has 60 units of flour, 132 units of sugar, and 102 units of raisins. A loaf of
raisin bread requires 1 unit of flour, 1 unit of sugar, and 2 units of raisins, while a
raisin cake needs 2 units of flour, 4 units of sugar, and 1 unit of raisins. If raisin
bread sells for $3 a loaf, and raisin cake sells for $4, how many of each should be
baked to maximize gross income? What is the maximum gross income?

Variables:
Let x1 – Number of loaves of raisin bread
Let x2 – Number of raisin cakes

Beds (x1) Wardrobes (x2) Constraint

Flour x1 2x2 ≤ 60
Sugar x1 4x2 ≤ 132
Raisin 2x1 x2 ≤ 102
Profit 3x1 4x2

Maximize P = 3x1 + 4x2

Subject to : x1 + 2x2 ≤ 60
x1 + 4x2 ≤ 132
2x1 + 2x2 ≤ 102
x1, x2 ≥ 0

New Program with Slack Variable:

Maximize P = 3x1 + 4x2 + 0S1 + 0S2 + 0S3

Subject to : x1 + 2x2 + S1 = 60
x1 + 4x2 + S2 = 132
2x1 + 2x2 + S3 = 102
x1, x2, S1, S2 + S3 ≥ 0
 Table 1

Cj 3 4 0 0 0
Product Quantity X1 X2 S1 S2 S3
0 S1 60 1 2 1 0 0
0 S2 132 1 4 0 1 0
S3 102 2 2 0 0 1
Zj 0 0 0 0 0 0
Cj-Zj 3 4 0 0 0

MRT: 60 ÷ 4 = 30
132 ÷ 4 = 33
102 ÷ 2 = 51

Entering Row (X2) = Leaving Row (S1) ÷ Pivot Element

60 1 2 1 0 0 ÷2
1 1
= 30 2 1 2 0 0

New S2 = Old Row – (Pivot Column Old Row PCOR * Entering Row X2)
132 1 4 0 1 0
1 1
-4(30 2 1 2 0 0)

12 -1 0 -2 1 0

New S3 = Old Row – (Pivot Column Old Row PCOR * Entering Row X2)
102 2 2 0 0 1
1 1
-4(30 2 1 2 0 0)

42 1 0 -1 0 1
 Table 2

Cj 3 4 0 0 0
Product Quantity X1 X2 S1 S2 S3
1 1
4 X2 30 2 1 2 0 0
12 -1 0 -2 1 0
0 S2
0 S3 42 1 0 -1 0 1

Zj 120 2 4 2 0 0
Cj-Zj 1 0 -2 0 0

MRT: 42 ÷ 1 = 42

Entering Row (X1) = Leaving Row (S3) ÷ Pivot Element

42 1 0 -1 0 1 ÷1

=42 1 0 -1 0 1

New X2 = Old Row – (Pivot Column Old Row PCOR * Entering Row X1)
30 1 0 0

-1(42 1 0 -1 0 1)
=9 0 1 1 0 1
-
2

New S2 = Old Row – (Pivot Column Old Row PCOR * Entering Row X1)
30 1 0 0

-1(42 1 0 -1 0 1)
= -30 -2 0 -1 1 -1
 Table 3

Cj 3 4 0 0 0
Product Quantity X1 X2 S1 S2 S3
1
9 0 1 1 0 -
4 X2 2
0 S2 -30 -2 0 -1 1 -1

3 X3 42 1 0 -1 0 1

Zj 162 3 4 1 0 0
Cj-Zj 0 0 1 0 -1

Decision:
x1 = 42
x2 = 9
Maximum P = 162
The baker must bake 42 of raisin bread and 9 of raisin cakes to
achieve the profit of $162.
INVENTORY MODEL

1. An auto parts supplier sells Hardy-brand batteries to car dealers and auto
mechanics. The annual demand is approximately 1,200 batteries. The supplier
pays $28 for each battery and estimates that the annual holding cost is 30 percent
of the battery’s value. It costs approximately $20 to place an order (managerial
and clerical costs). The supplier currently orders 100 batteries per month.

a. Determine the ordering, holding, and total inventory costs for the current
order quantity.
b. Determine the economic order quantity (EOQ).
c. How many orders will be placed per year using the EOQ?
d. Determine the ordering, holding, and total inventory costs for the EOQ.
How has ordering cost changed? Holding cost? Total inventory cost?

Solution:
D = 1,200 batteries
Cc = ₱8.40 per battery per year [0.30 (28)]
Co = ₱20

Optimal Order Quantity (EOQ)

2𝐶𝑜𝐷
𝑄=√
𝐶𝑐

2 20 1200
𝑄=√
8.40

48 000
𝑄=√
8.40

𝑸 = 𝟕 . 𝟔 𝒐𝒓 𝟕𝟔 𝒃𝒂𝒕𝒕𝒆𝒓𝒊𝒆𝒔
Total Annual Inventory Cost
𝑄 𝐷
= 𝐶𝑐 + 𝐶𝑜
2 𝑄

76 1200
= 8.40 + 20
2 76

300
= 8.40 38 + 20
19

= ₱𝟔 . 𝟗𝟗

Optimal Orders per Year

𝐷
=
𝑄

1200
=
76

= . 𝒐𝒓𝒅𝒆𝒓𝒔 𝒑𝒆𝒓 𝒚𝒆𝒂𝒓

Optimal reorder schedule

𝑃𝑙𝑎𝑛𝑛𝑖𝑛𝑔 𝑝𝑒𝑟𝑖𝑜𝑑
𝑡 =
𝑂𝑝𝑡𝑖𝑚𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑜𝑟𝑑𝑒𝑟𝑠
365
𝑡 =
15.8
𝒕= . 𝒅𝒂𝒚𝒔
 2. We need 1,000 electric drills per year. The ordering cost for these is $30 per order
and the carrying cost is assumed to be 40% of the per unit cost. And the
Accounting Department estimates the carrying cost is $40 per unit. Determine the
EOQ, total annual inventory cost policy, optimal number of orders per year and the
time between each order.

Solution:
D = 1,000 electric bills
Cc = $16 per unit cost [0.40 (40)]
Co = $30

Optimal Order Quantity (EOQ)

2𝐶𝑜𝐷
𝑄=√
𝐶𝑐

2 30 1000
𝑄=√
16

60 000
𝑄=√
16

𝑸=𝟔 . 𝒐𝒓 𝟔 𝒆𝒍𝒆𝒄𝒕𝒓𝒊𝒄 𝒃𝒊𝒍𝒍𝒔

Total Annual Inventory Cost

𝑄 𝐷
T. I. C = 𝐶𝑐 + 𝐶𝑜
2 𝑄

61 1000
T. I. C = 32 + 30
2 61

T. I. C = 976 + 1875

𝐓. 𝐈. 𝐂 = $
Optimal Orders per Year
𝐷
=
𝑄
1000
=
61
= 𝟔 . 𝒐𝒓𝒅𝒆𝒓𝒔 𝒑𝒆𝒓 𝒚𝒆𝒂𝒓

Optimal reorder schedule

𝑃𝑙𝑎𝑛𝑛𝑖𝑛𝑔 𝑝𝑒𝑟𝑖𝑜𝑑
𝑡 =
𝑂𝑝𝑡𝑖𝑚𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑜𝑟𝑑𝑒𝑟𝑠
365
𝑡 =
62.5
𝒕= . 𝒐𝒓 𝟔 𝒅𝒂𝒚𝒔

3. A trading company expects to sell 15,000 mixers during the coming year. The cost
per mixer is $200. The cost of storing a mixer for 1 year is $5 and the ordering cost
is $540 per order. Find the Economic Order Quantity. The storing cost continuing
to be $5 per mixer per year.

Solution:
D = 15,000 mixers
Cc = $5 per unit cost
Co = $540

Optimal Order Quantity (EOQ)

2𝐶𝑜𝐷
𝑄=√
𝐶𝑐

2 540 15 000
𝑄=√
5
 16 200 000
𝑄=√
5

𝑄 = √3 240 000

𝑸= 𝒎𝒊𝒙𝒆𝒓𝒔

Total Annual Inventory Cost

𝑄 𝐷
T. I. C = 𝐶𝑐 + 𝐶𝑜
2 𝑄

1800 15 000
T. I. C = 5 + 540
2 1 800

25
T. I. C = 5 900 + 540
3

T. I. C = 4500 + 4500

𝐓. 𝐈. 𝐂 = $ 𝟗

Optimal Orders per Year

𝐷
=
𝑄
15 000
=
1800
= . 𝒐𝒓𝒅𝒆𝒓𝒔 𝒑𝒆𝒓 𝒚𝒆𝒂𝒓

Optimal reorder schedule

𝑃𝑙𝑎𝑛𝑛𝑖𝑛𝑔 𝑝𝑒𝑟𝑖𝑜𝑑
𝑡 =
𝑂𝑝𝑡𝑖𝑚𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑜𝑟𝑑𝑒𝑟𝑠
365
𝑡 =
8.33
𝒕= . 𝒐𝒓 𝒅𝒂𝒚𝒔
 4. A manufacturer requires 1,000 units of a raw material, per month with a replenish
rate of 500 raw materials per day. The ordering cost is $2000 per order. The
carrying cost is estimated to be 10% of average inventory per unit per year. The
purchase price of the raw material is $50 per unit. Find the Economic Lot Size
and the total cost.
Solution:
D = 1,000 units per month therefore, 12,000 units per year of raw materials
Cc = $5 per unit cost [0.10 (50)]
Co = $2000
Demand (𝑑)
𝑎𝑛𝑛𝑢𝑎𝑙 𝑑𝑒𝑚𝑎𝑛𝑑
𝑑=
365 𝑑𝑎𝑦𝑠

12 000
𝑑=
365 𝑑𝑎𝑦𝑠

𝒅= .

Optimal Order Quantity (EOQ)

2𝐶𝑜𝐷
𝑄=√
𝑑
𝐶𝑐 1 − 𝑟

2 2000 12 000
𝑄=√
32.88
5 1−
500

48 000 000
𝑄=√
4.6712

𝑄 = √10 275 732.15

𝑸= . 𝒓𝒂𝒘 𝒎𝒂𝒕𝒆𝒓𝒊𝒂𝒍𝒔

Therefore, the manufacturer should order 3,206 raw materials every time inventory
for the raw materials reaches zero (0).
Total Annual Inventory Cost

𝑑
T. I. C = √2𝐶𝑐𝐶𝑜𝐷 √1 −
𝑟

32.88
T. I. C = √2 5 2000 12000 √1 −
500

T. I. C = √240 000 000 − √0.93424

𝐓. 𝐈. 𝐂 = $ 𝟗𝟕 . 𝟗

Therefore, if the manufacturer orders 3,206 of raw materials approximately 5

times a year, inventory cost related to this particulars is minimized at about
$14,973.90 per year.

5. LDR Manufacturing's requirement for raw materials is 25,000 kg. per annum. The
replenish rate is uniform to 1,000 raw materials per day. Each of them cost $100.
The Production Department estimates the cost of setup at $2,300 and according
to Accounting Department the carrying cost is estimated at 20% of the value of the
inventory. Determine the amount of the ordering cost and the minimum total
inventory cost.
Solution:
D = 25,000 kg per annum
Cc = $20 per unit cost [0.20 (100)]
Co = $2,300
Demand (𝒅)
𝑎𝑛𝑛𝑢𝑎𝑙 𝑑𝑒𝑚𝑎𝑛𝑑
𝑑=
365 𝑑𝑎𝑦𝑠

25 000
𝑑=
365 𝑑𝑎𝑦𝑠

𝑑 = 68.49
Optimal Order Quantity (EOQ)

2𝐶𝑜𝐷
𝑄=√
𝑑
𝐶𝑐 1 − 𝑟

2 2 300 25 000
𝑄=√
68.49
20 1 − 1000

115 000 000

𝑄=√
18.6302

𝑄 = √6 172 773.239

𝑸= . 𝒓𝒂𝒘 𝒎𝒂𝒕𝒆𝒓𝒊𝒂𝒍𝒔

Therefore, the manufacturer should order 3,206 raw materials every time inventory
for the raw materials reaches zero (0).

Total Annual Inventory Cost

𝑑
T. I. C = √2𝐶𝑐𝐶𝑜𝐷 √1 −
𝑟

68.49
T. I. C = √2 20 2300 25000 √1 −
1000

T. I. C = √2 300 000 000 − √0.93151

T. I. C = $ 𝟔 𝟔. 𝟔

Therefore, if the manufacturer orders 2,485 of raw materials approximately 5

times a year, inventory cost related to this particulars is minimized at about $
46,286.86 per year.
 Republic of the Philippines
BATANGAS STATE UNIVERSITY
College of Accountancy, Business, Economics and
International Hospitality Management
Batangas City

Problem Set
(Graphical Method, Simplex Method and
Inventory Model)

In Partial Fulfillment
of the Requirements of the Course Management Science

Submitted by:

Madamo, Joyce Anne

18-5376
BSA-2101

Submitted to:

Dr. Romer Castillo

Graphical Method
Simplex Method
Inventory Model